Dax breaks the neckline

Tomasz Wiśniewski

The decline of stocks is probably the most important event in the financial markets. Some of the indices are resisting the decline, some of them are leading and today we will talk about the DAX, which beat the lows from 2018 and 2017 so, in my opinion, belongs to the second group of the instruments.

Dax, the most important German index made a choice last week and broke the neckline of the giant Head and Shoulders pattern. We could have finished our analysis here as that sorts out the situation and sends bulls back home. Last week, price broke the lower line of the wedge and the neckline (yellow), which is a very technical sign of a bearish dominance. The distance between the top of the head and the yellow line is almost 2000 points, which means that we should expect the drop similar to that. This is just a theory but in my opinion, in this case, it is very probable.

DAX30 Weekly Chart

The sell signal will be denied, when the price will come back above the neckline, which as for now, is less likely to happen. The rise that we see today is just a normal pull-back and cannot be considered as a reversal, yet.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.